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BobB-nw writes with word that this April will be the trial date for SCO's financial reckoning. Novell will discover via the courts how much (if anything) SCO is going to be compelled to pay in compensation for the lengthy trial over Unix code rights. The NetworkWorld piece also offers an overview of the case. "In September, The Wall Street Journal described the ruling against SCO as 'a boon to the open source software movement.' But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively. Instead, Novell would have to pick and choose pieces to open-source, a process that could begin once the trial has ended."

From my SOX experience it was just to create undue bureaucracy in IT department's of publicly traded companies and some other accounting nonsense to make sure the bean counters are actually counting beans that really exist and not saying the kidney beans are jelly beans. SOX wasn't to hold anyone reasonable in a corp when things went bad, it was a knee-jerk law in response to Enron. Like the PATRIOT ACT was to 9/11

Heh. From the beancounting side, IT departments are notorious for lack of controls over financial assets, which impact legal filings, taxes, etc. From experience in mutliple organizations (none of whom were retailers, I should mention), the greatest source of preventable loss was IT.

I, for one, am grateful for SOX for giving me the backup I need to get IT departments in compliance. It's unacceptable when an IT department "loses track of" assets valued more than their annual salaries, and it's even more

I, for one, am grateful for SOX for giving me the backup I need to get IT departments in compliance

So, are you saying that if the network guys kept track of the hardware and what not you'd be happy and I wouldn't of needed three forms of paper work to get a bug tested then three different forms to get that approved then three more to get that actually in to production? SOX took one of the most nimble programming teams I've ever seen and slowed them to a crawl.

I've seen SOX implemented well, and I've seen it implemented poorly. It's possible to be SOX compliant without bogging down the dev teams, but as you alluded to, there were definitely some companies that over-reacted in a knee-jerk fashion and thought they'd better document every little thing six ways to Sunday in order to avoid the appearance of potential non-compliance.

It's not just hardware, BTW -- software is|can be a financial asset as well, and that's where you're most likely to lose track of $$$ of

Besides, scox paying novell is not the point. The point is to legally prove that Linux does not use proprietary UNIX technology, and to thereby stop the msft FUD.

Exactly! That's why I was rather confused by this quote from the summary.

"In September, The Wall Street Journal described the ruling against SCO as 'a boon to the open source software movement.' But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively."

Uh, who cares? We don't want their shitty Unix source! We want it to be known far and wide that Linux doesn't contain any of that shitty code! That's the "boon" to open source -- preventing proprietary vendors from being able to say "OooooOOOooh possible IP violaaaaations oooOOOOooh unkown liability ooowaaaah!" in an eerie voice to scare people off from open source! And this, a relatively high profile attempt to turn the vague scary threat of copyright violation into legal fact that fell flat on its face, should help do that.

Ends up being that Novell owns SCO retroactively and that the board of SCO and it's directors has been doing everything in a way that allows Novell to sue them for everything down to their pants and their genetic code (that probably is worthless anyway except as proof of relation to slugs or something...)

No, really. The Boies law firm representing SCO is being compensated by effectively taking part ownership in SCO. Having done that, should they not be liable for SCO's debts?

My contention for a while has been that, in taking compensation from SCO in terms of stock and shares, Boies has abdicated it's duty as an officer of the court. In a contingency compensation arrangement, the law firm gets paid when they win the case. But in this situation, they only get paid if SCO stock stays high, so their litigation goals are different than just winning.

I think they should be made to experience the full consequences of their agreement.

In a 'corporation', though, the company is an entity unto itself. The stock holders are not liable for legal damages assessed, right? The personal assets of the employees, chiefs and boards would also safe, unless they were gained through illegal means.

Also, there are such things as Limited Liability Partnerships in many jurisdictions. Even IF Novell's lawyers could pierce the corporate veil to the owners (assuming Boies had enough stock to be considered an owner) - which is a big if and extraordinarily unlikely - the Boies partners might be shielded from liability.Most likely, Novell may become a creditor in bankruptcy. It wouldn't surprise me if part of the settlement ends up being a junior security interest in major assets and a first-in-line security

Depends on the circumstances. With bankrupt companies, the trustee has a lot of leeway to recover funds that were paid inappropriately. I believe the phrase is "knew or should have known".

BS&F *knew or should have known* that their legal position was untenable. They also *knew or should have known* what the contracts said. The bottom line is that they got paid with money that they *knew or should have known* belonged to Novell.

point of interest Boies has redone that agreement to drop the stock part out. The Big Money in this is targetting various payments that TSCOG has done to various folks (including Darl and the rest of the CxO group)

Judge Gross does have the power to require a ROLLBACK of some of this money.

Oh and Novell would not be A Creditor since the funds have been ruled to be "converted" (humans would say STOLEN)so Taxes and Novell get paid first then the creditors list rolls down.

Not unless the law firm made a separate personal guarantee (i.e. contract) to stand behind those debts and why would they have given that to SCOs creditors? There are no more responsible for the debts of the corporation than any of the other owners. That is the whole point of corporation, to prevent direct exposure to liability of the owners whether they be other corporations, private individuals, or shareholders (public traded company). Novel can suck whatever assets remain out of the dried husk of SCO un

As has been pointed out, Novell isn't a creditor: they didn't loan SCO any money, but instead SCO kept Novell's money and used it to pay lawyers and salaries. Another has pointed out that bankruptcy judges have a lot of latitude. It could be argued convincingly, I believe, that McBride et al. and Boies knew or should have known that they weren't supposed to do that, and so they could be ordered to "return" the money to SCO so SCO can fulfill it's obligation to Novell.Don't get me wrong - I agree that it w

You mean the chair, with the stained cushions, left in the front reception area? I thought that that was being donated to Microsoft's Flight Simulator group (aerodynamics of physically accelerated lounge furniture).

Back in the mid-80's, there was a guy in my home town who started his own high-street company selling home computer products. Unfortunately, he didn't understand the concept of market saturation, so whatever sold well one month, he would buy twice as much the next month. After the sales figures came in, the company was immediately liquidated. Everything was still there - half stacked shelves with the stuff still in delivery boxes. Even the managers notepad had half written accounting notes with a large nega

My little brother got his arm stuck in the microwave. So my mom had to take him to the hospital. My grandma dropped acid this morning, and she freaked out. She hijacked a bus-load of penguins. So it's sort of a family crisis. Bye!
*slams door*

One thing that annoys me in these posts is all these Johnny Come Lately people who have just started to hate SCO as a result of their actions against Linux. I've been actively hating SCO ever since I had to use their piece of crap OS in 1993 on a 286 PC. All the bugger had to do was keep the modem connection open so we could send email but would it stay up? Would it buggery. It was falling over all the time and in the end we had to go 3 months without email to the outside world, a contributory factor in the company going bust.

So you think you have come to loathe SCO over these last few years? Let me tell you that real hatred takes 15 years to mature:)

One thing that annoys me in these posts is all these Johnny Come Lately people who have just started to hate SCO as a result of their actions against Linux. I've been actively hating SCO ever since I had to use their piece of crap OS in 1993 on a 286 PC.

I admit I was a Caldera employee back when they purchased SCO and left Tarantella alone. The first thing that happened was most of the Utah-based employees were replaced by employees from CA. The company that was once Caldera was gutted after the acquisition and replaced by SCO. I left shortly thereafter and my department was laid off 6 months after I left, and was replaced by SCO's equivalent. It is unfortunate to see my former employer slammed all over the news, but the reality is that those who worked ha

I also worked on OpenServer for a while. It is and was crap -- old and outdated. Did you know that Taco Bell used to use OpenServer systems in their restaurants, but that they recently completed a conversion to Linux?

hehe, that's what our accounting system runs on. Seems appropriate since the accounting program is an old outdated piece of crap that comes out with a new version every year anyway:O Can't be more than a handful of these specialty programs using it anymore.Zero issues with OS in 3-1/2 years tho, of course it doesn't do anything but serve up one program from one disk and backup to one tape drive. The IBM box, however, croaked in the 1st year (suspect cap. problem the repair was too easy to get)I did actuall

What do you mean? Your "this one", SCO OpenServer, *is* SCO UNIX. They simply changed the name of the product in 1995.They didn't spin off Tarantella. They sold off their UNIX business (OpenServer and Unixware), changed their name to Tarantella, and focused on that product. They were later bought by Sun. Caldera, a Linux company, company bought the UNIX business, changed its name to The SCO Group, and commenced their destructive litigation strategy.

That's a different company. The SCO that this is about used to be a Linux business named Caldera; then they bought software and trademark rights from SCO, and later on changed their own name to SCO and starting suing.

These are guys that have been around the block a few times. Theyhave seen Microsoft screw their business partners. They have seenMicrosoft attack their 3rd party vendors. They have been directlyon the receiving end of Microsoft treachery.

Just how many houses have to fall on these guys before they getthe hint.

Buisness with competitors is always interesting... Espectially with large ones because some devisions you are partners with and others you are competing with. The same with Apple and Microsoft or Apple and Adobe. They compete and yet they partner with each other. Even a small firm wich is partnered with a large company like Cisco, the small company better keep quite on who their customers are because Cisco will take that information and undercut its partner.

That crap is why Linux and the open-source BSDs exist. Tarantella is still around, as others have pointed out. This "SCO" is actually Caldera, the old Linux vendor.

WTF would you let one OS bankrupt your business? Surely a MicroVax, a desktop Sun box or a couple of AOL accounts would have let you send email. Or hell, you could have had a 56k leased line and hooked the SCO box up via Ethernet, which I'm pretty sure it didn't have problems with in 1993 as long as you used a good card.

In 1993 you had many other quality options. Why SCO on a 286? I know. Because it was cheap. That's the root cause of your company going bust - trying to get by on the cheap. If it was business critical why was there no backup plan in place? Why keep if when it failed? It was obsolite even in '93. Why didn't yuu call the people at Sun and buy a SPARC system running SunOS. Why not change the MX records on your DNS serve to point your email to a different server?

As part of my karmic payment for some particularly heinous deeds in a past life, I was root on a SCO OpenSewer box from about 2002-2005. If you have any doubt that my past-life deeds were, in fact, heinous, it was also running a pre-D3 version of the PICK OS/database on top of SCO. And I won't even go into the hardware...

The mere thought that the machine is probably now deservedly rusting away in the county landfill almost makes me happy.

Okay, could someone (more knowledgeable than I) explain how this whole trademark vs. IP thing works? From what I understand, it sounds like Novell owns the underlying IP of Unix, but I also thought The Open Group was in charge of the "UNIX" trademark/certification. So speaking purely hypothetically, say Novell were to get back into the Unix market, would they have to have certification by the Open Group to call it "UNIX"?

I guess my question is bit more far-reaching - what is the relationship between the IP holder v. the trademark holder in these circumstances, and are there any other examples where someone owns the IP of something, but doesn't necessarily own the trademark?

Errr... that's another way of saying 'there is no such thing as intellectual property'. Lawyers and other weasels who speak of 'intellectual property' are playing a classic quickness of the hand deceiveth the eye trick. Precisely, they're doing two things:

They're deliberately conflating the limited and short term contingent protections which Western states have found it pragmatic to offer creators or new ideas and products with the unlimited and long term protections which Western states have traditionally offered to property in land;

They're making a hegemonistic claim about the status of new ideas and expressions.

Whether property in land ought to be given the sorts of protections which Western society gives it is another question entirely. But that's beside the point. New ideas and expressions are not property, do not have the status of property, and do not have nearly the same degree of protection that property has. And it's in everyone's interest - that includes the 'content creators' - that it remains that way. Where would Walt Disney be now if all the classic fairy tales had been someone else's 'intellectual property'?

Remember IP is a whole section of law that is split into copyrights, patents, and trademarks. Trademark only deals with the Brand Name, i.e. Coca-Cola. Patents deal with the idea of something and copyright is the expression of an idea. The X/Open Group owns the trademark as it was given to them by Novell back in 1993. The group was also tasked with certification of Unix. Novell retained the patents and copyrights as was confirmed by the judge.

Actually it's only been relatively lately that prostitution has been illegal in the US. Because of "holier than thou" Bible thumpers prostitution was made illegal in most places. For instance Storyville [wikipedia.org] New Orleans was made the legal prostitution district in 1897, which latest until 1917. Prior to 1897 prostitution was legal throughout NO, but then to tax and control it the city passed legislation to make Storyville Prostitution Central.

heh. well i had nothing better to do today then to listen to a fat lady singing.

now all we need is the right tune, "ride of the Valkyrie" or "madam butterfly" don't seem appropriate, and my other suggestions are just undignified and unsuitable for the high class audience provided by/.

Caldera/SCO Group was reselling the legacy AT&T System V for x86, with some of their own enhancements. THAT code is still for the most part (c) Novell, who bought out AT&T's interest back in '92. There was also the input from Sun that produced Sys V.4, and drivers developed by numerous vendors, so opening the whole thing may be more trouble than it's worth at this point, given the dwindling interest.

Their last financial report (July '07, they apparently didn't file one for October '07) said that they had $15.79 million in total assets. This isn't taking into account any other debts. That was down $4 million from the previous quarter. Let's suppose that that drop repeated itself the next two quarters (since we're almost out of the current quarter). That means that SCO would have just under $8 million in total assets. So even if Novell took everything SCO had into possession and all other debtors got nothing, Novell wouldn't come close to recouping the money they were owed from Microsoft's $16.6 million Unix license payment. (To say nothing of Sun's $9.3 million license payment or any other payments.)

Another way to look at how much SCO is worth is to look at their market cap. Back in July, SCOX closed at $1.48 per share. Over 21.25 million shares, that's $31.45 million. Today, they're at $0.09 per share for a market cap of $1,912,500. Novell could easily buy up the remaining pieces of SCOX if they wanted to. Any way you slice it, SCO is toast and won't be able to pay Novell back even a fraction of what they owe them.

I belive you are correct with the exception of using their market capitalisation as a benchmark since SCOX has a "stockholder rights plan" (a.k.a "poison pill") that basically allows the directors to set their price should anyone actually want to take over the whole company. From SCOX last years 10-K (under "Risk Factors):

We have adopted a stockholder rights plan. The power given to the Board of Directors by the stockholder rights plan may make it more difficult for a change of control of our company to occ

I was enjoying this drama for the first couple of years... especially when it became very apparent that SCO was playing some sort of game at the request of Microsoft... and especially when it became obvious that SCO would lose. And it's true that technically, this is "another case" involving SCO, but this is really a part of the whole drama that is the downfall and failure of SCO. Mentally I imagined SCO people squirming around wondering what they must have been thinking when they brought all this upon th

This isn't money which "SCO owes Novell". This is Novell's money which SCO has retained (in breach of contract). The distinction seems trivial but should be important. In theory, it should give Novell priority over all other creditors (including the lawyers, accountants, and landlords with whom SCO has been merrily spending money since entering Chapter 11). The word "disgorgement" looms large in the future of this case.
A pair of loose analogies should make the distinction clear: if I rob a bank, and then use the stolen money to hire expensive lawyers in a futile attempt to escape justice, the bank is entitled to recover that money from the lawyers. But if instead I borrow money from a bank and then spend it all on expensive lawyers on my way out of business, the bank is out of luck. The current situation is more like the former analogy than the latter. In selling Sys V licenses to Microsoft and Sun, TSCOG was acting as Novell's agent: the money was Novell's all along.

Novell need not waste time and money picking thru Unix code to open source it... The real win for the open source movement would be to make sure that Unix IP could not be used against Linux ever again. Novell could simply and easily transfer the Unix IP to a trust that they setup whose irrevocable purpose would be to sit on the Unix code, never to claim copyright or patent infringements ever again.

But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively. Instead, Novell would have to pick and choose pieces to open-source, a process that could begin once the trial has ended.

First of all, the journalist is confusing Unix as a family with the UNIX IP that Novell owns. As a family, Unix is confusing because it contains contributions from many companies and organizations like components like RCU (IBM), filesystems (JFS, XFS, ZFS, etc), libraries (BSD, GNU,etc) and the like. Novell, however, knows exactly what it owns in terms of copyrights.

The main issue that needs to worked out is what amount Novell owed from the Microsoft and Sun licenses. When Novell sold SCO the Unix business (and not the IP), SCO agreed to pay Novell 100% of any UNIX licenses which Novell would remit 5% back to SCO for their trouble. SCO argued that the licenses to Microsoft and Sun were not UNIX licenses at all. The judge didn't buy their argument for although SCO may have called it differently, certainly the licenses they sold contained UNIX IP and thus Novell was entitled to a share. The reason why the judge did not summarily order SCO to pay Novell the full amount was there is a question of how much of the technology was Novell's UNIX and how much was SCO's IP (i.e. UnixWare, OpenServer). That question is being addressed by the court now. I highly doubt that SCO sold much of their IP to the likes of Sun whose Unix offering is much more advanced or Microsoft who isn't even in the Unix business.

Msft is sponsoring scox, and acacia to claim that proprietary technology was illegally put into linux. Of course, these are just more msft FUD PR stunt. But, sponsering companies like acacia and scox to abuse the US legal system, and file bogus lawsuits has a chilling effect on those who might want to use, or contribute to, linux. Msft is, very successfully IMO, putting a legal cloud over linux.